It ensures that the services provided by it should be in the most resourceful, cost-effective and viable way. Packages offer a complete assortment of packaging results plus offset printed cartons and flexible packaging materials. Its customers include well-known names such as Milliner and Pakistan Tobacco Company. It has been listed on all three stock exchanges in Pakistan. Packages Limited has always dominate the market since its inception due to its elegant heritage of quality product and innovation. Information Technology Infrastructure The departments at Packages Ltd. Includes HER, production, Accounts & Finance, product design, procurement, warehouse etc. All these departments are linked with the modern information technology infrastructure which includes hardware and software both. There is a separate IT department which manage and maintain the flow of information throughout the organization. Since 1 956, there is a huge IT infrastructure which has grown relative to the expansion Of the organization. Being more specific, both desktop and laptops are being used in the company.
Almost 95% of the operating system platform is that of Microsoft Windows whereas servers are using Linux and UNIX. SAP has been adopted as an enterprise software since 1999. For data management and storage, there is a centralized database. Moreover, Local Area Network (LANA) is being used as a networking platform for providing access of internet for whole organization. Financial Projections The investment in IT has grown in packages significantly since 1999. However, the rising trend has been flattened due to stability of the change.
The main reason for the high investments is that Packages wanted to keep pace with the industry to meet demand and quality. Above all, the business process have become faster with the innovation of new technology. It is the result Of gig quality infrastructure which has attracted the giant customers in the industry like Milliner, Pakistan tobacco. Enterprise Resource Planning (ERP) Systems Enterprise Resource Planning systems, as a matter of fact, are always important for any company for better collaboration, decision making and integration between different departments.
As far as the importance of ERP is concerned, it is no less than a key to success for a business to business company like Packages. As it is clear that company expanded so, there was an intense need of better integration been the departments for better value reaction so company established an ERP system to arrive at best industry practices of the time. The key vendor for ERP system at Packages is SAP. Six SAP modules are running for different fields like Supply Chain, Finance and HER departments. Moreover, there is a centralized database for back up as well as for better security.
Production Department Production is one of the major departments containing cutting and printing as major sub department. SAP links production with other departments for forecast of raw materials and inventory planning for future. It links recruitment, production, planning and sales departments that make up the whole production and distribution process. SAP and IT plays a pivotal role in the production department ranging the production order to the delivery of the order (Exhibits Production supplies and raw materials are mainly provided by Bullet Shah Packaging and DICE Pakistan Ltd.
Besides SAP RSI engine is software which assists management in materials forecasting. Manager from every department updates his resource requirements in the system. The system orders the optimum order quantity level. It has helped in ere stock-outs and optimal safety stock levels. This has streamlined the inventory and efficient handling of working capital. Training of Employees Organizations have to face many challenges when new changes are brought, it is usually termed as resistance to change. Similarly, Packages Ltd. Ad faced many challenges during the introduction and implementation of new technology. But the company overcome the resistance in the initial Stage. The process that the company adopted for bringing change is more similar to the Cotter’s eight (8) steps change model which is as follows;l (Exhibit 2) Different assure were taken to address the change depending upon the managerial level. For instance, seminars and workshops were conducted in REED at SUMS for the training of the senior executives to use the new technology.
Then the department head successively disseminated the information to the lower level employees. One thing is worth mentioning that apart from the cost of implementing and maintaining the ERP systems, employee training cost are quite significant. Costs & Benefits There is always a cost associated with implementation of ERP system and its sustainability. Answering to this question, the production manager of Packages said that although, it is true that the cost of ERP system is high for every company but now it has become the need of the hour to implement and update ones ERP system with time.
Also, if a company does not go with this change then it will have to incur more cost as compared to the cost of implementing the ERP systems. Impacts of IT Being realistic it can be assumed that information technology changed the rules of the game. It has enabled the interactions of marketing, sales, products processes, supply lines, stocks and many other areas in a single database. ERP system has abele Packages Ltd. o achieve the integration and efficiency in departments and overall cost reduction in the operations.
Integration and Efficiency The new system not only integrated the different disparate units of the company but also speeded up the business processes. It has also eliminated the loss of data as the backup is always available. It has integrated all the departments in a single computer system which caters to the needs of particular functional area. As a result, Packages enhanced the capability to generate better forecasts, quality products and efficient response time by laminating the data redundancy, material wastage, unnecessary delays and hang-ups. Surely, the ERP systems are providing a competitive advantage over its competitors.
However, Mr.. Salesman laved (ERP manager) mentioned during his interview; “It is not about the implementation of an ERR system but the utilization and application of ERP system which gives you a competitive edge over the rest. ” Cost Reduction Another benefit of the implementation of new technologies led to the reduction in cost of day to day operations. For instance, with the installation of Evidence, the top managers have been able to hold different meetings and induct different conferences virtually which, otherwise, would have been very costly. Highlighting the benefits of Information technology, Mr..
Salesman laved said, “Information technology does not provide tangible monetary benefits however; it improves the efficiency of other business processes which in turn gives you higher quality and higher returns. ” Competitors’ Analysis According to the Michael Porters Five Forces Model, Competitors are one of the forces. Packages Limited, besides having a monopoly in the packaging and printing industry for almost more than 30 years, is facing a fierce imputation in the industry. The competition has not only saturated the market but also has decreased the market share to 27%.
It is still the largest market share of any individual company. Referring to its greatest market share, Packages has been able to achieve this hallmark due to its excellent traditions, product quality and efficient business processes. It can be undoubtedly said that ERP system has been playing a major role in the profitability of the company since 1999. A brief summary about the history of the two major competitors is given below; Reason packages Reason Packages is known for innovation, quality, customer services and growth. Its foundation was laid down in 2003 for making corrugated boxes.
In addition, a flexible packaging plant was set up in 2011 for the provision of more quality products. The major customers of the Reason Packages are Negro Foods, LAG, PEEL, Lays, Milliner, Hairier, Orient and Waves. 2 SIAM Packaging (Pot. ) Limited SIAM Packaging is a privately held firm and it was founded in 1972. It is well known for the high quality rigid and flexible packages. The major customers are from various fields such as Tobacco, FMC, Food & Beverages, Pharmaceuticals and other industries in Pakistan & leading companies.
The top clients of SIAM Packaging (Pot. ) Limited include Academy, National, Shank, Bake Parlor, Peek Freaks, Milliner, MacDonald, Harden’s, Solon, Pakistan Tobacco Company, Recruit Benefices, Philip Morris International, Abbot and Stimulant’s. 3 Future Plans According to the ERP manager and production manager, Packages is planning to incorporate advanced technologies which are; Automated Inventory Management System (AIMS) AIMS will be benefiting the company in terms of providing more efficient inventory planning and inventory control environment.
The relevant department will be able to access the real time data related to finished products’ type, amount, final destination and delivery date. Moreover, it will also enable the company to estimate the lead time, reorder points and other inventory associated cost (such as holding cost). Machine Intelligence System (MIS) MIS will enable the production department to work more efficiently as the MIS will itself provide all the details regarding the machine such as starting time, temperature, internal or external fault, performance, productivity and breakdown. Our Analysis (SOOT)
SOOT Analysis is being used to evaluate the strengths, weaknesses, opportunities and threats involved in the IT system of Packages Limited. Considering the strengths of the system, ERP has enabled Packages to achieve cost effectiveness and efficiency. The RSI Engine has helped in better forecasting. New technology has increased responsiveness. However, the company has been weak in timely technology innovation. New technology is only introduced as the last resort. Timely improvements can take the company to the next level. There are opportunities for strengthening technical competitiveness.
This can result in attracting customers who are being served by the competitors. Threats exist in the form of competitors. (Exhibit 3) Recommendations After carefully analyzing the IT infrastructure of Packages, we have come up with the following recommendations that may help to improve efficiency of the systems; Improvement in production techniques linked with IT; this will ensure high quality products. (Quality Assurance Vs.. Quality Control) Technological up-gradation and innovation i. E. Cloud storage Proper performance control and evaluation: Providing the system to monitor and valuate performance of employees, machinery and departments.